Smarkets betting exchange sets dangerous precedent by closing winning accounts

[james19]

Just to report that the online betting exchange Smarkets.com now appears to be discriminately closing winning player accounts.

Through lengthy and strained discussions with management I have learned that the site is almost exclusively dependent on three external market makers, and these market makers are seemingly able to put pressure on management to terminate accounts that are not profitable to them. Management is frightened that these market makers could pull out leaving them with very little liquidity, and so is willing to do everything it can to appease them. In my personal experience I estimate to have won £20,000 at Smarkets over a six month period, however as of two days ago my account was closed by management against my wishes, with my balance expediently returned to me in full. I believe I am the first client to be excluded for winning too much, and have reiterated to company CEO Jason Trost that this move sets and dangerous precedent for their exchange, and raises serious questions about conflict of interest, and long term sustainability. I envisage that the number of excluded clients will only increase exponentially as time moves forward, and strongly urge management to rethink this highly questionable decision. Obviously the best solution would be for the market makers to evolve around market forces instead of artificially stifling them, or for them to reduce their exposure to a level at which they are comfortable losing. Kicking out winning players is definitely not the answer given the nature of the business model.

The Lotteries and Gaming Authority (Malta) and SBR have been informed and are investigating the case.

[allin1]

I suspect bedaq's liquidity is dependent on such market makers too. I wonder if things would go the same path with them. I wouldn't be surprised.

[YPS]

Without the market makers at smarkets the volume would be exactly zero.
This isn´t an exchange in reality.

[King_Suckerman]

Thanks James. I use smarkets a lot so would be interested to hear if there any further developments.

[sharlataans]

I don't get it, can anyone elaborate? What's market makers, what they had to do with this person's account closure?

Are you just a punter or you are offering/laying using their API?

20,000 is not a big deal at all IMO.

[Optional]

I don't get it, can anyone elaborate? What's market makers, what they had to do with this person's account closure?

Are you just a punter or you are offering/laying using their API?

20,000 is not a big deal at all IMO.

People who put up enough cash for regular bettors to bet against. Basically just a bookmaker or two using the exchange as their defacto interface.

Chances are they try to lay off most action on Betfair at a cent or two better odds.

So long term winners are taking their money.

How the market makers know who the counter party is to all of their bets is a more interesting question though I think.

[allin1]

People who put up enough cash for regular bettors to bet against. Basically just a Bookmaker or two using the exchange as their defacto interface.

Chances are they try to lay off most action on Betfair at a cent or two better odds.

So long term winners are taking their money.

How the market makers know who the counter party is to all of their bets is a more interesting question though I think.

I don't think the market makers know who is taking their money. If they do then it is very fishy, but my guess is that they just said "hey, there is someone who keeps winning and is taking our money, please ban him".

I remember that I read an interview with the owner or the manager of betdaq and he mentioned about such market makers, that they get a better commission rate to boost liquidity. Could be the same market makers

[YPS]

I guess it wouldn´t be a problem to have a few market makers to boost liquidity a little.
The problem at smarkets is that 99.9% of the liquidity comes from the market makers.

[james19]

I guess it wouldn´t be a problem to have a few market makers to boost liquidity a little.
The problem at smarkets is that 99.9% of the liquidity comes from the market makers.

Yes, which in in turn means that users are not going to post their own offers because the market makers are blocking them out. This coupled with the fact that consistent winners are currently not welcome given that the market makers are ostensibly able to put pressure on the chief exec to bar undesirable players leaves them with a somewhat flakey product offering.

Obviously free market exchanges should never take sides, and never behave like this. I look forward to the reversal of this appalling management decision, and will continue to challenge their stance until such time as they have created a free market platform which does not discriminate on the basis of intellect, which is essentially what this boils down to. An ideal world for the bookmakers, and now Smarkets it seems, would be one in which their users were mathematically illiterate.

[james19]

At the very least, at the end of their investigation SBR will have to amend their review of Smarkets to note that this site has a history of banning winners.

This would surely be the first time that was ever noted in relation to an exchange and hopefully might make management come to their senses a bit quicker.

[Santo]

It's likely a technical inefficiency in the case of the market makers (e.g. they get lines from somewhere else, their software processes, then spits out a new line which they push to the market), but players with faster information sources are able to get ahead of the moves.

It seems a short-sighted strategy on Smarkets behalf, mainly because they're small enough and can't afford negative publicity (and there are other solutions, such as a market delay), but certainly can't blame the market makers for advocating such a position.

[Pat McCrotch]

They wont be around long if they ban winners, simple

What the fukk was all that shit they were saying wen they opened about taking a few of betfairs big staking customers,

When Lou or Bill asked for reviews about smarkets I replied saying they were copying betfairs odds

I got shot down in flames, when it is as blatant as fukk

I can not fault smarkets for the odds but the inplay is woeful, really really bad, this proves its not real liquidity as they are obviously backing/laying on betfair.

overall I would rate them as A-

[allin1]

james19 have you tried betdaq? do you think they work with the same market makers?

[joey1963]

I tried smarkets but poor liquidity in most markets made me start using betdaq again. Betdaq has poor liquidity in many markets in-play but most pf the biggish horse racing & football (soccer) events are pretty good per-event. I won't pay the betfair 5% commission out of principle. Closed betfair account a long time ago.

[james19]

I have used Betdaq for 7 years and never received any complaint from them for winning too much. Indeed I have not heard of any other exchange on the planet that excludes winners, other than Smarkets. Betfair chooses to impose a tax, but that's still not as bad as outright exclusion from the fold!

[bogwell]

smarkets voided all my bets after market shift

Heres another example of smarket's protecting their market makers.
After seeing the market shift drastically and smarkets still offering old odds I placed a large bet with them.

Sure enough, this was obviously not to the lazy market makers liking and they voided all my bets !!!
They basically voided my bets because the market moved in my favour and they obviously had such a relationship with the layer they were willing to let him dictate their course of action!
Hey, isnt this basically like betting with a bookmaker??

Im pretty sure if I called them up and said "hmmmm, my bets arn't looking so bright now, any chance you can sort me out. wink wink, nudge nudge" I would just get a resounding "No!".

So basically, if you place a good bet and things start to swing in your favour you have no confidence your bets will ever stand.

Combine that with a terribly performing platform, laggy bet matching and rude customer service staff.

Will avoid them like the plague.

[HeeeHAWWWW]

Sure enough, this was obviously not to the lazy market makers liking and they voided all my bets !!!

That's ludicrous. What did smarkets say? After all, they must have a reason to void.

[james19]

Heres another example of smarket's protecting their market makers.
After seeing the market shift drastically and smarkets still offering old odds I placed a large bet with them.

Sure enough, this was obviously not to the lazy market makers liking and they voided all my bets !!!
They basically voided my bets because the market moved in my favour and they obviously had such a relationship with the layer they were willing to let him dictate their course of action!
Hey, isnt this basically like betting with a bookmaker??

Im pretty sure if I called them up and said "hmmmm, my bets arn't looking so bright now, any chance you can sort me out. wink wink, nudge nudge" I would just get a resounding "No!".

So basically, if you place a good bet and things start to swing in your favour you have no confidence your bets will ever stand.

Combine that with a terribly performing platform, laggy bet matching and rude customer service staff.

Will avoid them like the plague.

What market did you bet on? Are you sure that the event in question was completed in full? Are you able to provide a screenshot?

This is very worrying in true.

[james19]

You know how I was banned for life by the CEO for mentioning that I might complain to the LGA about my predicament... well it turns out that even Smarkets own rules suggest that to be an acceptable course of action once the company's own complaints procedure has been exhausted.

They make absolutely no mention of the fact that management reserve the right to impose a lifetime ban on any individual who does complain to the LGA, or indeed merely threatens to complain to the LGA (the latter was the public reason for my account closure given by Smarkets to an audience of 4500+ readers here (http://www.betangel.com/forum/viewto...7155&start=160) as they were keen to quickly quash any rumors that they were clamping down on winning accounts.

1. Customers should contact support@smarkets.com if he or she feels that the Smarkets Betting Rules were not properly enforced. Any disputes will be dealt with in a prompt and professional manner. If Smarkets does not resolve the dispute to the customer's satisfaction, he or she should contact the LGA at complaints@lga.org.mt.

I'm completely lost for words by the entire handling of my situation and will continue to challenge the decision. LGA and SBR continue to investigate, and if those avenues do not prove fruitful I shall write a letter to the Secretary of State for Culture, Media and Sport. There is no way that a regulated operator should be allowed to behave like this.

[Digo]

That's why Betfair will keep 90% of exchange bettors...

[bogwell]

What market did you bet on? Are you sure that the event in question was completed in full? Are you able to provide a screenshot?

This is very worrying in true.

Hi James19 The market didnt complete they voided before the off. Their reason was that the layer had made a mistake??
Problem was, I had covering bets elsewhere with a reputable exchange who were not likely to response to my requests too void those bets.

[King_Suckerman]

bogwell - did the match take place? it wasn't a case of all bets being voided becasue it was postponed or something?

[james19]

What match was it bogwell??

[james19]

Bogwell, if you believe that you may have grounds for a formal complaint then you might want to submit a complaint form to the LGA (licencing authority).

https://www.playresponsibly.org.mt/Complaints.aspx?dnmparams=/8wFhKIw8OCRGwru0pFMFb_3ZwaX8846I

I have already made a complaint to them about my case. Perhaps if a few complaints start rolling in then they might actually sit up and take notice of what's going on.

[james19]

Just noticed that bookmakersreview has downgraded Smarkets on the basis of my experience.

http://www.bookmakersreview.com/bookmakers-rating-news/smarkets-says-they-cannot-support-consistently-winning-punters/48018

I guess SBR should also put it on record that Smarkets has banned winners in the past. It seems my efforts to liaise with smarkets directly have fallen on deaf ears and they don't yet seem committed, as far as I can tell, to building a sustainable ecosystem which is accepting of all action, pro or recreational.

I would really love them to turn this around and become a leading exchange, but preferably only if my account were reinstated. If I can't be a part of the exchange then i'm not really bothered which way their business goes.